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Brent set for further gains

TVC:UKOIL   CFDs on Brent Crude Oil
Crude oil prices refreshed late-2014 highs during the Asian hours on Thursday just below the $78 threshold. Now, it looks like Brent takes a pause after an aggressive rally on Trump’s decision to abandon the nuclear deal with Iran. After this step, which was widely expected, traders started to price in new sanction on Tehran and therefore the decline in Iranian oil exports and production, which fuels oil demand.
In the current environment, when OPEC+ efforts coupled with geopolitical risks and the Venezuelan crisis support rising crude oil prices, the upcoming sanctions add to the already wide optimism in the industry as conditions in the global oil market continue to tighten, despite the record US shale production. At this stage, the prospects really look bullish , which on the other hand may prompt some OPEC members to pull out of the pact. Further fate of the agreement will be discussed at the key June meeting of producers.
In the short-term, there is a risk of profit taking at the current attractive levels, especially ahead of the weekend and fresh Baker Hughes data due tomorrow. Should Brent fail to keep above the $77 level in the nearest future, the price may retreat towards the $76,30 area, where buyers could reemerge.
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